Bulgarian Telegraph Agency (BTA), 97-02-14

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From: Embassy of Bulgaria <bulgaria@access1.digex.net>

EMBASSY OF BULGARIA - WASHINGTON D.C.

BTA - BULGARIAN TELEGRAPH AGENCY

14 February, 1997

CONTENTS

[01] SOFIYANSKI ON CABINET PRIORITIES

[02] PARLIAMENT APPROVES WIDER POWERS FOR CARETAKER CABINET

[03] BULGARIA EXPECTS IMF AND EU MISSIONS

[04] CABINET SETS UP A FINANCIAL COUNCIL

[05] CARETAKER CABINET FIRST NEWS CONFERENCE

[06] GOVERNMENT MAPS OUT MEASURES TO HANDLE OIL CRISIS

[07] UN MAY HELP BULGARIA COLLECT DEBTS

[08] REACTIONS ABROAD ON EVENTS IN BULGARIA

[09] MORE GERMANS VISIT BULGARIA

[10] PROSECUTOR GENERAL TATARCHEV: MILLIONS EXPORTED ABROAD

[11] TAX-FREE INCOME UP TO 25,000 LEVA A MONTH

[12] ELECTORAL LAW: 3% BARRIER, WHITE BALLOT PAPERS

[01] SOFIYANSKI ON CABINET PRIORITIES

ëMiracles cannot happen but we have been in a stalemate recently. Something should start changing,í Sofiyanski told Radio Free Europe Wednesday. Among the first tasks to the caretaker cabinet he named negotiations with international financial institutions and steps to ensure fuel and grain supplies. ëFrom the point of view of government, the petrol and grain crises are unquestionably the most important. From there on, the negotiations with the international institutions are extremely necessary. We need speedy privatization that would begin to stabilize money flows in the country,í the prime minister said.

Asked whether the caretaker cabinet will fix the exchange rate he said that at present this is impossible adding that if implemented it will be favourable for profiteers. The Prime Minister stated that right after the caretaker cabinet gets familiarized with the real situation in the country he will tell the people clearly what this cabinet plans to do and will conduct an open policy. ëWe need social peace, we need a new beginning of the economic changes in the country and of course, we need steps which would not be popular but will stabilize the economy to a certain extent,í he said.

[02] PARLIAMENT APPROVES WIDER POWERS FOR CARETAKER CABINET

The Bulgarian Constitution gives limited powers to caretaker governments their major task being to prepare the conduct of early elections.

Expanding the powers of the newly appointed interim government allows it to negotiate and sign lending agreements with the International Monetary Fund and other international financial institutions, which is vital for this crisis-ridden country.

An agreement for expanding the government's powers was reached by the political forces Tuesday following two days of consultations at the presidency. The Thursday decision was backed by 192 MPs of the 240- seat Parliament with only four abstentions in the ranks of the Socialists- led coalition.

[03] BULGARIA EXPECTS IMF AND EU MISSIONS

The IMF mission will probably come in the middle of next week, Bulgaria's representative to the Fund Peter Botousharov said over the national television. According to Botousharov, the caretaker cabinet, which took office Wednesday, is expected to sign a stand-by agreement. Monday President Peter Stoyanov sent a letter to IMF Managing Director Michael Camdessus asking for urgent technical and financial assistance to Bulgaria.

An EU mission is expected to come to Sofia by the month's end to discuss Bulgaria's most urgent needs, said on television Bulgaria's Ambassador to the EU E.Ivanov. Later it emerged that the EU mission will arrive within a week and its visit will coincide with that of the IMF mission. Bulgaria expects the EU to support the country's balance of payments and to extend humanitarian and social aid. The amounts will be specified during the mission's visit. Bulgaria expects to receive from the EU some 350 million Ecu. On February 24 Greece will probably propose to the EU to render urgent economic and technical assistance to Bulgaria and Albania.

Answering a question by Representative Wolf at a hearing of the Foreign operations subcommittee of the House Appropriations committee, on Feb. 12, US Secretary of State Albright said: ëWe are looking at a Balkan initiative more in the economic field, and we will be looking at Bulgaria.í Rep. Wolf urged the US to seek ways for providing urgent food and medicines aid to Bulgaria.

[04] CABINET SETS UP A FINANCIAL COUNCIL

The Council will carry out the Government's policy for financial stabilization and external financing of this country. It will conduct negotiations, sign loan agreements with countries, international organizations, financial institutions and the European Union. The purpose of these agreements will be to stabilize financially this country and they should be signed on terms not less favourable than those at which such treaties have been signed so far. The Council was also mandated to conduct negotiations on the repayment of Bulgaria's foreign debt.

Prime Minister Sofiyanski presides over the new Council. Its members are Finance Minister Gavriiski, National Bank Bulgaria Governor Filipov, Ventseslav Antonov, Executive Director of the Cooperative Commercial Bank, Krassimir Angarski, President's Secretary on Economic Issues and Bulbank Executive Director Chavdar Kunchev.

[05] CARETAKER CABINET FIRST NEWS CONFERENCE

The key to this country's stabilization lies in accelerated privatization and consolidation of enterprises and banks, Finance Minister Svetoslav Gavriiski said in his first statement to the press. Gavriiski is against the dollarization of the economy as Bulgaria does not have enough foreign exchange to introduce internal dollar payments. ëBulgaria should negotiate with the international financial institutions to receive a sum at least equal to the payments we have to make this year,í Gavriiski said. Bulgaria will be unable to service its foreign debt without foreign funding, Gavriiski said.

ëThe cabinet will have to quickly make up for some gaps in Bulgaria's European policy, this country should be more actively represented before the European institutions,í Foreign Minister Stoyan Stalev said. New guidelines should be adopted regarding Bulgaria's cooperation with NATO, Stalev believes. ëWe cannot do much but we can at least give clear signals to Europe of where Bulgaria stands and what it aspires to and give a foreign political expression to public attitudes,í Stalev said.

Prime Minister Sofiyanski, Finance Minister Gavriiski and Social Affairs Minister Ivan Neikov are planning to meet with army and police officers demanding pay rises. Several days ago army officers held a silent protest in front of the Presidency and on Wednesday policemen protested in front of Parliament building in police cars with their sirens on. ëDecisions for pay rises meeting their demands will be made when these are feasible. We will not make decisions only to ease social tension,í Sofiyanski said.

During its three-month term the caretaker cabinet will hold sittings every Monday and Thursday, the Prime Minister said.

[06] GOVERNMENT MAPS OUT MEASURES TO HANDLE OIL CRISIS

On Thursday morning Prime Minister Sofiyanski left for Neftochim for a series of meetings. Upon his arrival there later in the day, he said a tangible markup of petrol prices is imminent. he also said the first thing to be done is handle the fuel crisis and only then call the culprits to account.

Bulgaria has been facing severe petrol shortages over the last two weeks and most filling stations chose to close down. The small quantities of petrol supplied by Neftochim go to health care and welfare establishments, the Interior Ministry and public transport. This oil refinery has nearly depleted its reserves and the management last week said it does not have money for fresh crude oil deliveries.

[07] UN MAY HELP BULGARIA COLLECT DEBTS

Bulgaria, in turn, has money to collect from foreign countries. The largest such debtor is Iraq, which owes this country more than 2 bln. USD. Although Iraq has recognized this debt as an official one, since 1991 it hasnít paid anything, because of the Gulf crisis and the UN embargo imposed on Iraqi export of petrol.

The press quoted Antonio Vigilante, Resident Representative of the UN Development Program to Bulgaria, as saying that Bulgaria can raise this issue before the UN Security Council. While the sanctions against Iraq are not lifted the Council will study certain special cases, Vigilante is further quoted as saying. However, the Council's decision depends on the political conditions in every concrete country and the difficulties it experiences, he added.

Iraq is ready to repay its debt to Bulgaria, Iraqi Ambassador here Mohammed Amin Ahmad said recently. Yet, this can be done only after the lifting of the embargo or in case the Security Council gives a special permit.

According to Vassil Vassilev, chief of the Bulgarian-Iraqi Consortium, Bulgaria will receive its money from Iraq after the lifting of the embargo. However, the UN Sanctions Committee has a long list of countries to which Iraq owes money. Bulgaria ranks 37th in this list, following France, Russia, Japan, etc. In Vassilev's view efforts should be made to find a positive solution of this problem. Bulgaria's creditors, the London and Paris clubs and certain big banks will probably lobby for Bulgaria to collect its debt from Iraq. ëThe possibility to recover their own debts from Bulgaria will make them our natural allies,í Vassilev stated. He does not rule out the possibility that the sanctions against Iraq are partially lifted. There was already a similar precedent: Iraq was allowed to export a limited amount of petrol to Turkey and Jordan in exchange of receiving food.

Bulgaria implemented strictly the UN against Iraq and Libya, who owe it billions of dollars. The country also observed strictly the embargo against Yugoslavia, with huge direct and indirect losses to its economy. It sustained further losses from the broken transport links across Yugoslavia. No compensation has come so far. The Bulgarian public feels betrayed because no one seems to recognize the sacrifices it made in the years of economic sanctions against Yugoslavia, Head of State Peter Stoyanov recently said in an address to the North Atlantic Council. He said the country's receivables amount to half of its external debt. Bulgarian estimates put Yugoembargo-related losses, both direct and indirect, at 10.3 billion USD. Other sources mention the figure of 6 billion.

Countries in Asia, Africa and Latin America owe Bulgaria about 2 billion to 3 billion US dollars. The figure does not include inter-company debts. Bulgaria has 30 foreign debtors. Libyaís official debt to Bulgaria, for instance, totals 40 million dollars. Together with the inter-company debts it adds up to 450 million dollars. Many believe the only solution is getting a UN permit for petrol supplies before the embargo is lifted. This is not impossible, provided that Bulgaria manages to convince the international community that this will help the country handle the crisis. Syria's debt to Bulgaria is of some 80 million US dollars' worth and to Bulgarian trade companies - of about 35-36 million US dollars' worth. Recently ex-minister of trade and foreign economic cooperation Atanas Paparizov said that there is an idea that part of this debt is repaid in grain. Negotiations on reaching a similar agreement are conducted with Kazakhstan, which owes Bulgaria some 30 million US dollars.

In the first half of 1996 debtors repaid 174.9 million dollars. Central bank figures show it was up by 39 million from the previous year. Most of it were Russian settlements with natural gas under the Yamburg agreement. Developing countries repaid only 33 million US dollars.

[08] REACTIONS ABROAD ON EVENTS IN BULGARIA

Sir Geoffrey Patty described as exceptional the victory of democracy in Bulgaria and the latest events in this country. ëWe are pleased with the chance for saving Bulgaria from the disastrous situation it is in - a state of almost complete economic collapse. We hope that it would turn not only to genuine democracy but also to a stable economy and gradual progress to prosperity and closer integration with the remaining part of Europe,í Sir Geoffrey Patty said.

The Russian Foreign Ministry welcomed the signing of a declaration for overcoming the crisis in Bulgaria by the parliamentary floor leaders with the mediation of President Peter Stoyanov, National Radio reported, citing a press statement by the Information and Press Department of the Russian Foreign Ministry. The appointment of a caretaker cabinet is a positive step in resolving the crisis in Bulgaria, the Russian Foreign Ministry said. Russia is ready to actively cooperate with the cabinet of Stefan Sofiyanski in promoting bilateral relations, the spokesman said. In this respect Russia's course remains unchanged, the official representative of the Russian Foreign Ministry said.

In a special declaration German Foreign Minister Klaus Kinkel says the agreement among the political forces in Bulgaria and the appointment of a caretaker government headed by Stefan Sofiyanski make him optimistic that the government will take the first steps for overcoming the economic crisis without wasting time, said the Bulgarian National Radio. The German Foreign Minister also reportedly said Bulgaria can rely on Germany's solidarity in the future.

[09] MORE GERMANS VISIT BULGARIA

ITC has made reservations for 21,464 Germans for this summer, according to a TC official in Frankfurt, Manol Dimitrov. TUI bookings reported 5% more business with Bulgaria than last year, and Neckerman 10% less business. The figures are of January 31. Most tourists stayed at Sunny Beach, Albena and Golden Sands, which are being promoted together as the Bulgarian Riviera. German holiday makers spent 73 billion D-marks in 1996, shows a survey by Dresdner Bank. Despite benefit cuts, unemployment and investment in the former East Germany, Germans have not given up their summer holidays. Yet they prefer budget vacations, which is a reason for more Germans to come to Bulgaria this summer, Dimitrov said.

Several days ago the Tourism Committee said Bulgarian resorts are safe for foreign tourists and guests, taking issue with safety concerns reported by Bulgarian and foreign media.

[10] PROSECUTOR GENERAL TATARCHEV: MILLIONS EXPORTED ABROAD

The export of money, gold and valuables is legal, with airport services not checking sealed packages from banks. The Prosecutor General is convinced all banks use this channel. It was not until three months ago that the Prosecutor General's Office ordered the Interior Ministry to open valuable parcels.

Appointing a caretaker cabinet on Wednesday, President Peter Stoyanov urged it ëto take immediate and firm action against the plunder of the nation by criminal people and groups including those with political protection.í The President called for ëan immediate end to the export of valuables and capital stolen from the Bulgarian people.í

[11] TAX-FREE INCOME UP TO 25,000 LEVA A MONTH

The amendments were prompted by the need to at least partially adjust taxes to swiftly changing prices and incomes, and to increase collectibility in the higher income brackets.

[12] ELECTORAL LAW: 3% BARRIER, WHITE BALLOT PAPERS

The percentage floor needed to qualify for seats in Parliament raised a heated discussion. Its reduction was proposed and backed by MPs of the Left. The independent MPs the opposition Popular Union coalition at first supported the suggestion, but on Tuesday the Popular Union backed down. The MPs of the opposition Union of Democratic Forces objected strongly.

According to UDF floor leader Sokolov ëthe aim of the Socialists- led coalition in seeking to cut the threshold is transparent: to make possible for its puppets to take seats in the next Parliament, which will erode the Parliament's stability and will obstruct its operation with the formation of new parliamentary groups. The BSP is already trying to undermine the work of the next Parliamentí.

According to Popular Union Co-Chair Stefan Savov, the reduction of the floor and the entry into the next Parliament of small groups will make it even less efficient than the current one.

Stefan Gaitandjiev of the Left parliamentary group argued that larger representation in Parliament that will bring its composition closer to the popular will.

UDF leader Ivan Kostov said that the national consensus among the political forces, which was reached with the appointment of the caretaker government, has been put at stake. There was no agreement not to reduce the barrier, Georgi Avramov of the Left countered and recalled the attempts of the Left to achieve a national consensus. According to Mr. Avramov the European experience has shown the small parliamentary groups contribute to strengthening understanding.

Explaining her vote against the reduction of the percentage barrier E.Mihailova of the UDF said that with this vote the Parliament has destroyed the fragile national consensus.

Under the amendments to the Electoral Law adopted on Thursday each candidate will be entitled to receive 300,000 leva (as of today, thatís 100 USD) for an election campaign. The rules of covering the election campaign by the national media were specified. The campaign will start and end with addresses of the parties and coalitions, registered to take part in the polls, broadcast on national radio and television. The participants in the election disputes will have to pay before they are broadcast on the two national media according to rates that are to be set.

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